Book and Concept
From the Wikipedia:
"Economic Democracy is a socioeconomic philosophy that suggests transfer of decision-making authority from a small minority of corporate shareholders to the larger majority of public stakeholders. While there is no single definition or approach, all theories and real-world examples of Economic Democracy are based on a core set of fundamental assumptions.
Proponents generally agree that modern conditions of economic instability tend to hinder or prevent society from earning enough income to purchase its output production. Centralized corporate monopoly of common resources typically forces conditions of artificial scarcity upon the greater majority, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.
Assuming full political rights cannot be won without full economic rights, Economic Democracy suggests a variety of models, theories, and real-world examples for solving problems of economic instability and deficiency of effective demand. Overall, Economic Democracy promotes universal access to common resources that are typically privatized by corporate capitalism and centralized by state socialism. Supporting agendas include democratic coorperatives, fair trade, social credit, and the regionalization of food production and currency." (http://en.wikipedia.org/wiki/Economic_democracy)
Book: Economic Democracy: A Worthy Socialism that Would Really Work. by David Schweickart
“A Worthy Socialism” was intended to demonstrate rigorously that there is an alternative, at least in theory: an economically viable form of socialism that would be more democratic than capitalism and at least as efficient. Against Capitalism made the same point, but extended the argument further. Economic Democracy would be not only as efficient as capitalism and more democratic, but also more rational in its growth, more stable, more egalitarian, less prone to high unemployment, more ecologically friendly. I was sick of hearing even progressives say that “we are going to have to stop using the term ‘capitalist economy’ as if we knew what a functioning non-capitalist economy would look like.” (http://www.solidarityeconomy.net/2006/10/25/economic-democracy-a-worthy-socialism-that-would-work/)
Economic Democracy, Socialism with a Market, explained further:
"Economic Democracy: the Model
From these considerations a theoretical model comes into view, a socialist alternative to capitalism quite different from the Soviet model. I call it “Economic Democracy.” It consists of three defining institutions:
- A market for goods and services, which is essentially the same as under capitalism.
- Workplace democracy, which replaces the capitalist institution of wage labor.
- Democratic control of investment, which replaces the capital markets of capitalism.
Let me elaborate briefly on each of these key institutions.
1. I’ve long been convinced that markets are a necessary component of a viable socialism. Central planning does not work for a sophisticated economy. The knowledge and information problems are too great. This is the great negative lesson to be drawn from the socialist experiments of the past century. But these markets should be largely confined to goods and services. They should not embrace labor or capital. And they should be regulated. Not all goods and services should be commodified, certainly not health, education—or water. There are valuable lessons to learned from the best examples of European social democracy as to what goods and services can be effectively provided by the state, and how markets might be effectively regulated.
2. It is now well established that productive enterprises can be run democratically with little or no loss of efficiency, often with a gain in efficiency, and almost always with considerable gain in employment security. This is the positive lesson of a great many recent experiments in alternative forms of workplace organization. Of course structure and culture are important here. Not all forms of workplace democracy work equally well. Good management is important. Managers need a certain degree of autonomy to manage effectively. But this management should be answerable, ultimately, to its workforce, one-worker, one-vote.
3. Some sort of democratic control of investment is essential if an economy is to develop rationally. This is the great negative lesson to be drawn from the failure of neoliberalism. But control of investment is exceedingly difficult if the investment funds themselves are privately generated. The solution to this problem is conceptually simple. Don’t rely on private investment. Generate your investment funds publicly—via taxation. In my article and in my subsequent work, I advocate a capital assets tax for this purpose. These funds should be allocated to public banks, which channel them back into the economy, utilizing both economic and social criteria—including, importantly, employment creation.
Regarding these three basic institutions, it is important to keep in mind that the last century was thick with economic experimentation, not only the large-scale experiments with various forms of capitalism and socialism, but also small-scale experiments in individual enterprises. I am convinced that the empirical data now available to us strongly support the claim that an economy structured along the lines suggested by the model presented above would work better than capitalism. We know a lot now about regulating a market economy. (We know that laissez-faire doesn’t work.) There is a vast literature now extant on worker-owned or worker-managed enterprises. We know what problems are likely to arise, and how these can be addressed. There have been many attempts at macro-economic planning, often involving the allocation of investment resources. We know that intelligent investment planning is possible.
In my view we can now assert with a high degree of scientific confidence that an economy structured as an Economic Democracy (the theoretical structures suitably modified to take into account certain practical contingencies) will be at least as efficient as capitalism, more rational in its development, and more democratic. It will also be less susceptible to the glaring defects of capitalism: excessive inequality, unemployment, poverty in the midst of plenty, overwork, and environmental degradation." (http://www.solidarityeconomy.net/2006/10/25/economic-democracy-a-worthy-socialism-that-would-work/)
From David Schweickart at http://www.solidarityeconomy.net/2007/03/02/economic-democracy-vs-parecon/:
"I argue that “the market” is not in fact a unitary mechanism, but should be disaggregated into three markets: a market for goods and services, a labor market and a capital market. I argue further that it is those latter two markets–the labor and capital markets–that do the most damage under capitalism and hence need to be replaced. I argue that a competitive market for goods and services, while not wholly benign, is vastly preferable to alternative allocative mechanism, whether they be centralized planning a la the Soviet union or the decentralized, participatory planning of Albert and Hahnel.
Let me set out the basic institutional structures of what I call Economic Democracy, a model of socialism I consider to be vastly superior to both capitalism and the Soviet model of centralized, command socialism. And to Parecon. The basic model has three fundamental features.
- Enterprises are governed democratically by their workers. Ultimate authority rests with the workforce, one person, one vote. Workplace democracy is the replacement for the capitalist labor market
- Enterprises compete for customers in a relatively free market. That is to say, the market for goods and services is carried over from capitalism.
- Capital markets are replaced by what I call “social control of investment.” Funds for investment are generated from a capital-assets tax, a flat rate tax imposed on all enterprises–not from the private savings of wealthy individuals. These funds are allocated, first to regions on a per-capita basis, and then to public investment banks in the regions, which are responsible for allocating these funds for
a. public capital projects,
b. existing enterprises wanting to expand production or upgrade their technology and
c. individuals wanting to start up a new enterprises.
I propose several other features in what I call the “expanded model” of Economic Democracy. I won’t discuss them here, but for the sake of completeness, let me note that Economic Democracy would also include
- The government acting as employer-of-last resort
- A quasi-capitalist sector comprised of small businesses and perhaps a sector of entrepreneurial capitalist firms,
- A policy of “socialist protectionism” that blocks low-wage competition from poor countries but rebates the tariff proceeds to those countries.
I have argued at length, in various books and articles, that such an economic structure would be at least as efficient as capitalism, more rational in its growth, more egalitarian, better able to cope with the ecological challenges we face, and vastly more democratic." (http://www.solidarityeconomy.net/2007/03/02/economic-democracy-vs-parecon/)
"The cornerstone of economic democracy is empowerment of working people. This means working people gaining control over the economy at all levels and ensuring that economic processes serve their best interests, rather than the interests of a wealthy minority.
More specifically, I see economic democracy at three main levels:
First, at the micro or company level, workers gaining greater control of the workplace and participating in management, and going further, democratically managing and owning their companies;
Second, at the meso or intermediate level, workers on a wider scale collectively controlling investment funds to benefit local and regional economies and in the process gaining equity in companies and influence over their operations;
Third, at the macro or societal level, working people as citizens democratically allocating resources through a national investment fund to achieve social goals (e.g. supporting specific industries, helping depressed regions, promoting green energy, building high-speed rail), and also vetting investment decisions through state-level investment councils.
Within this tri-level framework there can be plenty of diversity, with various forms of democratic ownership and governance of companies as well as a range of democratic investment mechanisms and financial institutions." (http://www.solidarityeconomy.net/2012/03/31/empowering-workers-through-economic-democracy/)